A prenuptial agreement, commonly referred to as a “prenup,” is a legal contract entered into before marriage or civil union that is unique to each couple, but typically addresses financial issues.
For many couples, a prenup can serve as a road map for their financial partnership during the marriage.
A prenup can preemptively set forth how certain assets including retirement funds, real property, executive compensation such as restricted stock units and businesses are divided in the event of a divorce or legal separation.
You and your future spouse can craft the prenup to suit your specific needs. For example, you can even protect your intellectual property rights or a future business, which might be merely an idea at the moment.
It can also protect your premarital property and inheritances, set forth estate rights and even determine how much, if any, spousal support will be paid in the event that you or your spouse decide to dissolve the marriage.
For many parents who intend to gift significant assets to their adult children, it may be a relief to know that their hard-earned assets will pass to their children and even grandchildren and not end up in the hands of their adult child’s future former spouse. For those families who intend to create a financial legacy, a prenuptial agreement is a necessity rather than a choice.
Many years ago, the perception was that prenups were for people with significant resources.
Now, prenups are very common. Some surveys indicate that more than half of “millennials” pursue a prenup before marriage. And for people who have been married and divorced, prenups can alleviate the concern of future divorce litigation and protect the children from the former marriage and a future spouse.
With a prenup, there can be the financial certainty that enhances a marriage.